6/02/2003 @ 10:14AM

Puncturing The ImClone Hype

Could
ImClone Systems
‘ Erbitux be a powerful cancer fighter after all? Maybe.

A new study presented June 1 at a meeting of oncologists seems to boost that contention. But there are still reasons to doubt that Erbitux will be approved soon or that it will eventually be a blockbuster. Wall Street bid ImClone
shares up 20% today on positive results from the study, but the party is premature. A comparison with
Genentech
‘s
Avastin, another medicine against colon cancer that’s being studied, reveals how full of hype the Erbitux story still is.

ImClone Systems
Merck KGaA
, which has the rights to sell Erbitux in Europe, conducted the new trials, which were presented at the annual meeting of the American Society of Clinical Oncology in Chicago. In this large, randomized study, Erbitux shrank colon cancer tumors by at least half in 23% of patients when used with chemotherapy, and 11% when used alone. Those numbers mirror the results ImClone boasted of in 2001, before the U.S. Food and Drug Administration rejected a new drug application on the grounds that the data were not sufficient to prove that Erbitux worked.

Merck KGaA, which is distinct from the U.S. company of the same name, will use this new data to try to get Erbitux approved in Europe. ImClone and its U.S. partner,
Bristol-Myers Squibb
, issued a statement saying they will talk with the FDA about trying to get U.S. approval as well. The new data do offer proof that Erbitux has a role in fighting colon cancer, but that does not necessarily mean the FDA will be satisfied. One doctor who has been involved with clinical studies of both Erbitux and Avastin says there is reason to be doubtful.

“Is this a potentially effective drug for cancer patients? Absolutely,” says Alan Venook, a professor of clinical medicine at the University of California at San Francisco. “But I’m not sure this data is enough to get a drug approved.”

Richard Evans, a pharmaceuticals analyst at Bernstein, made a similar point in a note to investors this morning. “Merck KGaA’s European Erbitux trial is strong enough to demonstrate that Erbitux works,” Evans wrote, “but the poor trial design will likely render Merck KGaA’s trial insufficient for Bristol-Myers to file with the FDA.” Evans still forecasts that the drug will be approved after more clinical trial data becomes available, and he projects 2007 sales of $400 million.

One problem: The Erbitux trial lacks a control group or a comparison to conventional chemotherapy, so the study does not show clear survival benefit. Venook will be heading up a clinical trial with Erbitux and chemotherapy in previously untreated patients for Bristol and ImClone, and that could help further answer questions about the drug’s effectiveness. In the meantime, Venook says the real star right now is Avastin, the first cancer drug to work by inhibiting blood flow to tumors by blocking a protein called the vascular endothelial growth factor (VEGF).

When added to chemotherapy, Avastin improved the survival of untreated colon cancer patients by 50%; patients who took Avastin lived 20.3 months, six months longer than those who received only chemotherapy. Venook says Avastin is a “monumental” advance, while Erbitux is merely “incremental.” He was on an independent committee that Genentech formed to monitor the data coming from its tests of the drug, and he was impressed by how conservative the company was.

“Genentech is to be credited for really good drug development,” he says. “They’re not overstating what they have right now, nor have they raised expectations. This is really an example of doing it right.”

In contrast, ImClone’s development plan–not least its relationship with the FDA–has been seriously botched so far. Moreover, the company is in near total disarray. Former Chief Executive
Samuel
Waksal
Samuel Waksal
is awaiting sentencing in New York; his brother Harlan took up the CEO mantle and then dropped it. Companies like
Millennium Pharmaceuticals
and
Novartis
have received approval for cancer drugs without proving that they extend survival, but those efforts have involved carefully crafted messages. They also involved evidence at the molecular level that the drugs reduced cancer–something ImClone doesn’t really have.

In the meantime, there are still other scientific dragons to slay. Doctors will no doubt want to test Avastin and Erbitux in combination and may even add other drugs like
AstraZeneca
‘s
Iressa or a new VEGF pill being developed by Novartis.
Amgen
and
Abgenix
are developing their own drug, which is similar to Erbitux. None of the medicines are cure-alls.

“With all of these agents, the real problem is that patients benefit, but it’s really only 10% or 20% of patients who benefit,” says Venook. “Can’t we figure out who benefits and who doesn’t?”

That will be the next step: using genetic tests and other methods of separating those patients who will be helped from those who will not.